Germany PMI Services was finalized at 56.2 in September, down from August’s 60.8., lowest since May. PMI Composite was finalized at 55.5, down from August’s 60.0. Markit said business activity rose at slowest rate for four months. Rates of growth in new business and employment also eased. Average prices charged by services firms rose at near-record rate.
Phil Smith, Economics Associate Director at IHS Markit:
“Services activity grew strongly in the third quarter, but the pace of recovery is slowing and we’re set for a more moderate period of economic growth in the final months of the year. Our current forecasts are for a 3.0% quarter-on- quarter rise in GDP in Q3, followed by a 1.2% gain in Q4.
“The loss of momentum is partly natural as activity gets closer to pre-pandemic levels, but the drag on growth from material shortages is also becoming more noticeable, impacting services firms directly and also via a slowdown in manufacturing.
“With cost pressures remaining stubbornly high and demand still picking up, the rate of services output price inflation continues to run at close to the quickest in the series history stretching back almost two decades.
“Supply bottlenecks are no longer just a manufacturing problem, and the threat of a continued spillover to other parts of the economy, coupled with inflationary pressures, has dampened service providers’ growth expectations somewhat.”
